JERUSALEM — Israeli Prime Minister Benjamin Netanyahu agreed Thursday to form a new coalition government that is expected to try to curb years of preferential treatment for the country’s ultra-Orthodox minority and may push for restarting Middle East peace efforts. But a last-minute snag over the title of his top partners prevented the plan from being formalized.
The new coalition would be the first in a decade to exclude ultra-Orthodox Jewish parties. It includes two new rising stars in Israeli politics who have vowed to end a controversial system of draft exemptions and generous welfare subsidies granted to tens of thousands of ultra-Orthodox seminary students.
‘‘The next term will be one of the most challenging in the history of the state,’’ Netanyahu told his Likud-Yisrael Beitenu parliamentary faction Thursday, shortly before the deal was expected to be signed. ‘‘We are facing great security and diplomatic challenges.’’
After weeks of deadlock, Netanyahu wrapped up coalition negotiations overnight with Yesh Atid and the Jewish Home, a party aligned with West Bank settlers.
Later Thursday, however, Yesh Atid and Jewish Home accused Netanyahu of reneging on a promise to appoint their leaders as deputy prime ministers and all sides were in talks to resolve the dispute. The prime minister’s office did not immediately comment on the allegation.
The issue was not expected to be a deal-breaker and an agreement was still expected to be signed within a day so that the new government could be sworn in by Monday, just two days before President Obama is to arrive for his first visit as US president.
Significant progress on talks on the peace front could prove to be more difficult than other domestic issues, given bitter disagreements among coalition members as well as deep differences with the Palestinians.
Nonetheless, Netanyahu’s senior partner, the centrist Yesh Atid party, is vowing to at least make an effort to restart negotiations. The peace process remained frozen throughout Netanyahu’s previous four-year term, when his right-wing bloc partnered with other hard-line and ultra-Orthodox factions.
‘‘We have to begin talks with the Palestinians immediately. We need to sit at the negotiation table. We haven’t sat there for four years,’’ Yael German of Yesh Atid, who is expected to serve as the new health minister, told Israel’s Army Radio. ‘‘Let’s sit and proceed toward a peace agreement. It is essential.”
Although Netanyahu’s bloc emerged as the biggest faction in the Jan. 22 election with 31 seats, he struggled to form a coalition with the necessary 61-seat majority in the 120-member Parliament. His new coalition is expected to control 68 seats.
The negotiations had stalled over several thorny issues, including the division of key Cabinet portfolios and plans to reform the draft.